THANKS FOR YOUR CALL ON WEDNESDAY, I ENJOYED OUR CONVERSATION. I LOOK FORWARD TO HEARING FROM YOU NEXT FRIDAY AS AGREED. AS YOU MENTIONED, YOU CAME INTO THE STAIRMASTER/RackIt MATTER “IN THE MIDDLE.” SINCE I CONTACTED THE “OTHER MR. BRYANT,” I’M NOT SURE HOW YOU GOT RE-INVOLVED. NONETHELESS, ALLOW ME TO FILL IN SOME MISSING PIECES AND RECAP SOME OF WHAT YOU ALREADY KNOW.

I INVENTED RackIt IN 1990 AND INTRODUCED IT AT THE 1991 IRSA SHOW IN SAN FRANCISCO. SINCE MY MARKET RESEARCH SHOWED LIFECYCLE WAS THE MOST PREVALENT MACHINE IN THE INDUSTRY, THE FIRST RackIt WAS DESIGNED FOR THAT PRODUCT AND INJECTION MOLDED. AFTER SHIPPING HUNDREDS OF THAT MODEL, MY COMPANY BEGAN GETTING NUMEROUS REQUESTS FOR THE STAIRMASTER4000PT.

SINCE MY COMPANY LACKED THE FINANCING FOR ANOTHER INJECTION MOLD, IT WAS FORCED TO SETTLE FOR GETTING THE 4000PT RackIt TO MARKET WITH A VACUUM-FORMED PRODUCT. DESPITE HAVING MORE MACHINES IN THE FIELD, THE LIFECYCLE RackIt WAS BEING OUTSOLD AT A THREE-TO-ONE RATE BY THE 4000PT RackIt. THIS POSED A CONSIDERABLE PROBLEM, SINCE THE QUALITY OF THE VACUUM-FORMED PRODUCT WAS INFERIOR TO THE INJECTION MOLDED ONE. THE PROBLEM WAS COMPOUNDED BY THE RETURN OF BROKEN UNITS THAT THE HOLDERS HAD SNAPPED OFF OF, DUE TO PEOPLE LEANING ON THE CONSOLE. THIS PROBLEM WAS READILY SOLVED BY MOVING THE HOLDERS FROM THE SIDE OF RackIt TO THE BACK WITH ANOTHER VACUUM-FORM MOLD, BUT THE INJECTION MOLD QUALITY STILL NEEDED TO BE MATCHED.

TO SOLVE THIS QUALITY PROBLEM, MY COMPANY DECIDED TO CONTACT STAIRMASTER SPORTS/MEDICAL PRODUCTS IN 1992. MY COMPANY WAS HOPEFUL OF GETTING A CONTRACT TO PACKAGE RackIt WITH STAIRMASTER’S MACHINES TO FINANCE AN INJECTION MOLD. ARMED WITH STRONG SALES/ORDER NUMBERS AND A PRODUCT THAT HAD BEEN DEVELOPED TO ITS NEXT LOGIC STAGE BY MARKET TESTING, AND CUSTOMER FEEDBACK, THE POTENTIAL OF A RELATIONSHIP WITH STAIRMASTER WAS EXTREMELY EXCITING. AN HOUR-LONG MEETING WITH BERNIE BOGLIOLI, VP OF MARKETING, RESULTED IN EVEN MORE EXCITEMENT. AFTER SHOWING MR. BOGLIOLI THE “NEWLY DESIGNED 4000PT RackIt,” HE SAID STAIRMASTER WOULD BE MORE INTERESTED IN BUYING THE PRODUCT OUTRIGHT, WHICH IS ITS POLICY CONCERNING PRODUCTS LIKE RackIt. HE SAID HE WOULD GET BACK TO ME IN A COUPLE OF WEEKS WITH A PROPOSAL.

AFTER INVENTING RackIt, MY GOAL WAS TO WORK WITH THE PREMIER COMPANY IN THE FITNESS INDUSTRY. THAT MEETING BROUGHT MY DREAM CLOSER TO REALITY. HOWEVER, I WAITED THREE WEEKS FOR THE PROPOSAL MR. BOGLIOLI HAD PROMISED, BUT IT NEVER CAME. MY FOLLOW-UP CALLS TO HIM WERE NEVER RETURNED. UPON SEEING MR. BOGLIOLI AT THE NEXT CLUB INDUSTRY SHOW, HE SIMPLY DISMISSED THE ENTIRE MATTER BY STATING THAT STAIRMASTER DIDN’T WANT WATER NEAR THE MACHINES OR THE DISPLAY COVERED BY A BOOK OR MAGAZINE.

IN 1993, MY COMPANY DEVISED A NEW MARKETING STRATEGY TO ENABLE THE TYPE OF DISTRIBUTION OF RackIt MOST BENEFICIAL FOR THE COMPANY AND THE INDUSTRY. THE NEW STRATEGY EVENTUALLY EVOLVED INTO THE “WORLD’S MOST POWERFUL SPORTS DRINK ADVERTISING PROGRAM” CALLED, “AD/RACK” VALUED AT $5 MILLION. FOR THIS PROGRAM, RackIt EVOLVED FROM THE ORIGINAL THREE-PIECE DESIGN INTO A SOLID, ONE-PIECE UNIT.

[SIDE NOTE: SEED AND BERRY ADVISED MY COMPANY IT HAD TRADE DRESS RIGHTS ON THE ORIGINAL DESIGN.]

IN APRIL 1998, AFTER PUTTING ALL OF THE PIECES IN PLACE FOR THE AD/RACK PROGRAM, I DECIDED TO CONTACT STAIRMASTER SPORTS/MEDICAL PRODUCTS TO MAKE ANOTHER ATTEMPT AT WORKING TOGETHER. I CALLED MR. BOGLIOLI TO ARRANGE A MEETING. WHEN MR. BOGLIOLI ASKED WHAT I WANTED TO MEET ABOUT, I TOLD HIM (AND YOU, ON THE SPEAKER PHONE) I NEEDED TO MEET WITH HIM CONCERNING RackIt. DURING THAT MAY MEETING WITH YOU AND MR. BOGLIOLI, I EXPLAINED THE AD/RACK PROGRAM, DISPLAYED THE ONE-PIECE RackIt, AND INVITED STAIRMASTER TO WORK WITH MY COMPANY SINCE ITS RACK WAS INFRINGING THE PATENT I HAD PENDING. I WAS ESSENTIALLY OFFERING STAIRMASTER AN OPPORTUNITY TO PROFIT FROM VIRTUALLY EVERYONE OF ITS COMPETITOR’S MACHINES, BUT THAT MEETING WAS COUNTERPRODUCTIVE.

AFTER YOU ADVISED ME THAT STAIRMASTER WAS NOT INTERESTED IN JOINING OUR COMPANY WITH THE AD/RACK PROGRAM, YOU PUT ME IN TOUCH WITH LEE ROWLS, VP OF NEW PRODUCT DEVELOPMENT & ENGINEERING, CONCERNING THE PATENT SITUATION. AFTER A COUPLE OF CONVERSATIONS WITH MR. ROWLS, HE TRIED TO CONVINCE ME THAT STAIRMASTER’S RACK IS PRIOR ART TO THE ONE I HOLD A PATENT ON. HOWEVER, I DON’T THINK MR. ROWLS WAS AWARE OF MY MEETING WITH MR. BOGLIOLI WHERE I REVEALED THE NEWLY DESIGNED RackIt (WHICH APPEARS TO HAVE BEEN USED AS MODEL FOR STAIRMASTER’S RACK) THAT SEED AND BERRY ADVISED TRADE DRESS RIGHTS WERE ATTACHED TO AND EVENTUALLY WAS DEVELOPED INTO OUR CURRENT PRODUCT.

I WAS ENCOURAGED WHEN YOU MENTIONED THAT YOU WANT THIS SITUATION RESOLVED. I LOOK FORWARD TO OUR NEXT CONVERSATION. UNTIL THEN, ENJOY LIFE. GOD BLESS.

Dr. Bryant didn't call me on July 7, as he said he would.